Francis Moreau, of France, the pre-race favourite, was knocked out in the first round when he failed, by over a second, to make the top eight qualifiers. Italy's Andrea Colinelli set the best time of 4min 24.64sec, followed by Stuart O'Grady, of Australia (4:25.70) and Obree's 4:26.96.
Last year Moreau was beaten in the final by Chris Boardman, who is not competing after injury in the Tour de France.
The event, which is widely considered the second most prestigious event after the Tour, has attracted more than 800 cyclists from 77 countries.
However, yesterday's events were overshadowed by last Friday's accident involving the 24-year-old French rider, Patrice Sultice, who was left paralysed from the waist down after he crashed into a team-mate during training. Doctors say he may never walk again. His team-mate was not seriously hurt.
Workers put finishing touches over the weekend on the track of the Luis Carlos Galan velodrome, named after a political leader who was assassinated during Colombia's drug wars in 1989. The International Cycling Union declared the track ready to go for Tuesday's start.